"Undoubtedly, memory chips, storage drives, and, of course, AI chips may hold back the AI boom a bit, at least over the medium term. That said, power stands out as another serious bottleneck that the big AI firms will need to address, hopefully sooner rather than later, for the sake of investors heavy on the AI names as they skate through a bit of volatility this February."
"Of course, some firms, like Oracle , have taken power into their own hands by rolling up their sleeves to tackle the power problem with small nuclear reactors (SMRs) and strategic partnerships to bridge the power gap, so to speak. Whether it's renewables (wind, solar and nuclear), natural gas or anything else, tomorrow's AI data centers are going to be increasingly power hungry."
Memory chips, storage drives, and AI chips may constrain AI growth over the medium term. Power capacity emerges as a separate, serious bottleneck for large AI firms and investors. Firms such as Oracle are pursuing small modular reactors and strategic partnerships to secure additional power. Future AI data centers will rely on renewables, natural gas, and nuclear to meet rising energy demands. Power-sector equities have rallied amid the AI tailwind, yet many valuations remain reasonable relative to growth potential. The iShares U.S. Power Infrastructure ETF (POWR) provides concentrated exposure to power infrastructure, though recent price action lags early-2022 levels.
Read at 24/7 Wall St.
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